Oil profits are to fuel a $15 billion commitment to renewable energy, the first zero-carbon city and a global research network.

Abu Dhabi, already a significant investor in cleantech through its Masdar Clean Tech Fund, is poised to become a major hub for cleantech manufacturing, production and research with a commitment of $15 billion for renewable energy. The largest of the seven emirates that make up the United Arab Emirates, the oil-rich Abu Dhabi government announced the heavy capital commitment at the World Future Energy Summit, a three-day cleantech conference which ends today.

The bulk of that $15 billion will go toward projects within the emirate.

"We are looking at building a large-scale industrial base here in Abu Dhabi," Alex O'Cinneide, a partner at the Masdar Clean Tech Fund, told the Cleantech Group.

"All the large-scale manufacturing that's taking place now in solar and things like that, we want to bring it here. We want to be able to offer this up as an area where these kinds of skill sets are readily available."

A six square kilometer tax-free zone is set to open in Abu Dhabi 2009, offering full foreign ownership for light industry, development units and laboratories, as well as facilities for education and research.

And the emirate isn't just encouraging the industry, it's using the technology as well.

The Masdar Initiative, the emirate's umbrella group for all of its renewable projects, just signed a deal with the U.K.'s BP (NYSE: BP) and Australia's Rio Tinto (NYSE: RTP) for a 500 megawatt hydrogen-fired power plant for Abu Dhabi. The project, which would be the largest of its kind in the world, includes plans for carbon capture and storage. It's expected to cost $2 billion, not including the investment in CO2 transportation and sequestration.

The front-end engineering and design of the facility should be complete by the end of 2008, with the plant coming into commercial operation in 2012.

Masdar, which means "the source" in Arabic, is also about to open up bids for a 100 MW concentrating solar power plant in Abu Dhabi.

The Masdar group has said it considers solar thermal technology the most relevant renewable energy source for the region.

Using a parabolic trough system, the facility, expected to be operational by the end of 2010, will be the the first of many CSP facilities, according to Madar. "A huge amount is focused on Abu Dhabi. We're building power here, we're building a city, we're building a university, we're focusing on building a manufacturing base," said O'Cinneide.

The Masdar City project, unveiled at the conference, aims to be the world's first zero-carbon, zero-waste, car-free city. And it isn't even part of the $15 billion commitment.

The city's electricity is expected to be generated by photovoltaic panels, with plans to get cooling from concentrated solar power.

As part of the ambitious design, water would come from a planned solar-powered desalination plant, and landscaping within the city and crops grown outside the city would be irrigated with gray water and treated waste water produced by an expected water treatment plant.

The project breaks ground next month, with a target to grow eventually to 1,500 businesses and 50,000 residents when completed in 2016.

The city's first resident will be the Masdar Institute of Science of Science and Technology, opening in 2009. The institute, formed in partnership with the Massachusetts Institute of Technology, does fall under the $15 billion commitment.

It would be the world's first graduate level institution focused on alternative energy and sustainability.

Masdar's research network, which also falls under this week's large capital infusion, is more than just the new university.

Columbia University in New York, the Imperial College of London, the Tokyo Institute of Technology, and others have signed up to be part of the network, which will have projects jointly financed by Masdar and industrial partners.

The resulting intellectual property rights would be shared among all the parties.

As for spending some of Abu Dhabi's cash outside of the emirate, the $250 million Masdar Clean Tech Fund already deployed most of its capital in 2007, one year ahead of schedule.

The fund's portfolio includes equity stakes in Atlanta waste treatment startup EnerTech Environmental; Seattle, Wash.-based HaloSource, an antimicrobial and clean water solutions company; Austin, Texas-based thin-film solar developer HelioVolt; as well as the ever-popular Segway, based in Bedford, N.H. "We obviously target a commercial return, but we're also very concerned with how those companies could be a strategic fit into the overall Masdar Initiative and activities in Abu Dhabi," said O'Cinneide.

He said they're focused on their portfolio companies right now, but there are plans in the works for the future.

"We will be launching a series of funds within Masdar. Maybe more specialized, maybe more general. They're decisions we'll make as we continue on."